Lee Hyo-jin covers the Bank of Korea, the banking industry and broader financial news. Her previous beats include foreign affairs, North Korea and general reporting on Korean society.
Huawei open to reviving ties with Korean chip firms as US sanctions continue to bite
An exhibition hall inside Huawei's R&D center in Pudong District, Shanghai / Courtesy of Huawei
By Lee Hyo-jin
Washington's sanctions on Beijing have caused losses for Korean businesses too, says Huawei official
SHANGHAI — Korean chipmakers have been disadvantaged by U.S. sanctions, which prohibit them from cooperating with Huawei, according to an official at the Chinese telecom giant. The official also expressed the company’s willingness to resume business with Korean firms.
"Before the sanctions, there was considerable cooperation with Korea in the semiconductor sector. We purchased about $10 billion worth of chips annually from Samsung and SK hynix. However, since the U.S. sanctions, we can no longer procure semiconductors from them. This has undoubtedly caused losses for Korean companies," the official told Korean reporters during a media tour of its R&D hub in Pudong District, Shanghai, Friday.
"If there were no sanctions, we would purchase advanced Korean products."
The official, who spoke on condition of anonymity, noted that American sanctions have spurred rapid development in China's semiconductor market and the firm's self-sufficiency drive, stating, "Since we cannot procure from outside, we have no choice but to source domestically."
However, the outlook for renewed cooperation between Huawei and Korean chipmakers remains grim, with U.S. President-elect Donald Trump poised to return to office in January.
During his first term, Trump targeted Huawei by restricting its access to cutting-edge semiconductors and working to exclude the company from global markets. He implemented a ban on the supply of semiconductors produced using U.S. equipment, software, and designs to the Chinese company without prior approval. This policy created significant challenges for Korean semiconductor firms, complicating their business operations and supply chains.
Responding to concerns about Trump’s potential trade policies, the Huawei official said, "It’s difficult to comment on a hypothetical situation. When the initial sanctions were imposed, it was a challenging period for us."
U.S. President-elect Donald Trump signs autographs during a visit to The Great Commoner cafe in Dearborn, Mich., Nov. 1. AP-Yonhap
Nonetheless, the official emphasized Huawei's commitment to globalization, as articulated by its founder.
He also said that despite bans in some European Union member states on Huawei’s involvement in critical 5G infrastructure, the company’s operations in countries like Germany, Spain, France and Italy remain steady.
"Europe is rational in its approach, focusing on better products and solutions," he said.
Huawei’s R&D center in Pudong District, established in 2000, currently employs over 20,000 people, focusing on the development of smartphones, smart driving technologies and wireless mobile internet.
However, they will soon move to a new R&D facility in Qingpu District, Shanghai. After beginning operations in March, the newly built center aims to become a key hub for Huawei’s advancements in 5.5G, AI and cloud computing.
Outside of China, Huawei has established R&D centers in other countries leveraging regional strengths, officials said. For instance, in France, where there is a strong tradition of art and visual production, the firm established an art research center. In Russia, which has a rich history in mathematics, Huawei set up research facilities that focus on mathematical technologies.
This year marked a critical juncture for Huawei, which employs 207,000 people and operates in over 170 countries and regions.
"The year 2024 marked the dawn of the 5.5G commercialization era. Many companies around the world, including those in China, have already introduced 5.5G services," another official said as she guided reporters through the exhibition hall. "It was also the inaugural year for AI-powered devices, with artificial intelligence becoming an integral part of everyday life."
The exhibition hall showcased the firm's latest innovations, including AI advancements in autonomous driving technologies and mobile broadband.